Asmara

Centric Energy Corp. (TSX VENTURE:CTE) is in talks to kick-start oil exploration activities off the cost of Eritrea. The company is in negotiations with the Government of Eritrea and other exploration corporations.

Centric Energy has submitted an application for a production sharing contract (PSC) to the Eritrean Government in October 2009, according to media displays on the company’s web site.

While the final agreement has yet to be worked out, the Eritrean Ministry of Mines and Energy in Asmara granted Centric exclusivity for the application area.

The geographic area of interest includes the Dahlak Block in the Red Sea, where Italy’s Agip conducted field surveys and drilled wells on the Dahlak archipelago in the 1930s.

The wider terms of the PSC are said to include an initial four-year exploration period followed by two optional extension periods each of two years.

According to the Chief Executive of the company, the key to unlocking Eritrea’s petroleum potential has yet to be found. However, he is confident that with serious determination oil and gas potentials can be uncovered, given that a lot of work had been already started earlier and given that the existence of oils shows and gas blow-outs can be regarded as evidence for untapped resources.

“The discovery of gas only would not impact negatively the attractiveness of Eritrea as a offshore destination, given that the increasing number of mining companies will boost the demand for power,” he adds.

He estimates the need for power in Eritrea will increase at an rate of 10 MW per each mine under production.

Centric Energy has been introduced to Eritrea by Canadian mining company Sunridge Gold, supporting the Eritrean Governments efforts to build a strong oil, gas and mining industry.